Take a look at the brilliant full page ad Foodland ran in The Advertiser in Adelaide last week.
We have run a similar but much smaller campaign across the counter of our newsXpress newsagency using flyers. The customer support against the behemoths of supermarkets, petrol outlets and c-stores is excellent. Australians want small businesses to thrive.
Newsagents ought to consider such a campaign promoting their retail channel. It’s not a new proposal. I put it forward in 2002 and had 150 newsagents offer support. None of the newsagent suppliers would get behind it nor did the associations at the time. Maybe it is time to revisit such a campaign. However, I suspect that this is now best executed at the marketing group level where discipline can be managed.
There’s no prizes for guessing who Foodland are having as tilt at here – and good on them. Having dealt with Foodland in another industry I admire their approach and their principles.
The newsagency industry has forsaken the greatest opportunity of all time to take on the majors. I am not too sure how many newsagents there are in Australia but there are certainly enough that if we came together under one banner with the buying power we could muster then we would be nigh unbeatable – as it stands we risk everything in trying to take on the supermarkets who, it would seem, are hell bent on destroying main street retailers, aided and abetted by the Australian Government through Australia Post.
And by sheer apathy and a single-mindedness to be our own boss, we let them!
Until newsagents wake up to the fact that multiple marketing groups will never be as successful as a single banner, and unaligned state/federal organisations will never be as powerful as a single united voice then we will continue to get slaughtered in the market.
As someone in the IT game once said “When a new technology rolls over you, you can choose to be part of the steamroller or part of the road”.
I know which part I’d rather be.
I think this equally applies in our industry – we need to recognise that change is upon us – go it alone and perish or unite and run with it!
Jim,
You can not seriously be suggesting that one single banner is what the industry needs. I far as i am aware that is what Newspower was aimed at. The concept is idealistic and not the least bit practicle. Even if it were achievable from an internal point of view (highly unlikely) it would completely and utterly fail from a marketing standpoint.
Newsagents already have the potential for strong buying power through GNS. Unfortunatly the stationary commodity, GNS itself and they way in which the relationship between GNS, marketing groups and newsagents are organised is poor at best.
And on the note of unaligned state and national representative bodies; unity is NOT the be all and end all! Having a ‘fragmented’ industry, if that is what you wish to call it, is better than having an industry represented by one body that doesn’t act in the best interests of its members.
You may be interested to know that the supermarket industry does not rely so heavily on industry bodies like the newsagency industry. Much of what the newsagency representative bodies handle is done at a marketing group level in the supermarket industry.
The supermarket industry also has a number of extremely robust marketing groups who are doing extremely well against coles and woolworths. And these independant supermarket retailers are competing more directly with the two major players even more so than newsagencies.
Having an industry that is not banded together, whether it be under a banner or through representative membership, is not the problem.
Jarryd,
Perhaps the concept of a single banner is idealistic – just what Roger Corbett and his counterparts would have loved to hear us say – that’s why Woolworths/Coles/Australia Post/OfficeWorks/etc/etc will beat the pants off us every time.
Let’s not hold Newspower up as the model for what a national marketing group should be. I am still grappling with, and trying to understand, what Newspower actually is and what it does for me as a member.
As for a unified industry body – I am not promoting any of the existing bodies, all I am saying is that a unified body, call it what you will, will be more effective in dealing with industry issues than what we have to date.
On the issue of strong buying power, I question why as a potential group of 5000 or more, we are unable to buy at a more competitive rate on day to day lines that we are continually beaten on. Perhaps the lack of a decent marketing group is preventing us from capitalising on the good deals that we all know happen [fear of a libel case prevents me going into more detail on this one]
Jim,
Although I do not want to hold Newspower up as a model for any marketing group it appears to be the only practical model for such a purpose. Having one national marketing group would severely dilute the newsagency industry. Seperate marketing groups allow stores to have a point of difference, it allows consumers more choice and provides for greater competition.
I can not think of any other industry where only one banner exists.
I assume you are mostly referring to stationry when you say that we are unable to buy at competative rates. We can’t buy at competative rates because GNS is managed/structured badly and there no form of discipline extended from the cooperative.
Part of the problem is not our buying power but the way in which newsagents merchandise and structure their retail prices. BigW, Officeworks and the like do not price stationary at the high margins newsagents do. They also have great discipline when it comes to merchandising. They own the ‘discount’ market, newsagents need to own the ‘branded’ market.
As for the industry body issue i am not convinced that one body is needed to effectivly tackle issues. But i suppose we will have to wait and see.
Quote…..”BigW, Officeworks and the like do not price stationary at the high margins newsagents do.”…..
Not sure about Big W exactly but Woolworths take a 50% margin on stationary and my experience with the Woolworths Group is that if Woolworths can get it then Big W will want it too.
Niall,
I know stores who are supplied by the Metcash warehouse generally run between 45 and 50% GP on stationary. And these prices would be less competative than Woolworths.
It is also worth noting that Woolworths are likely to run their stationary prices higher than their counterpart BigW. Stationary is one of BigW’s core categories, it is not a core category of Woolworths. While i have no doubt BigW’s buying power allows them to run some products at 50% GP it could not do so with its entire range. Its exercise books are prices at a mere few cents. Surely these are not 50% GP; i would doubt they are making anything on these.
But its not just everyday pricing. Look at the promotional pricing offered by GNS, it alone is pathetic. BigW can afford to run big promotions at next to no profit simply to get customers into the store.
I believe the newsagency industry average GP on stationary is around 60%.
They own the ‘discount’ market, newsagents need to own the ‘branded’ market.
Couldn’t agree more.
I am not sure how having one brand would dilute the newsagency industry but I take your point on the need for points of difference, also trying to create a “one size fits all” wouldn’t work for us whereas it is the basis on which the majors can and do operate. I guess it’s my one shot at nirvana!
Marketing aside, I still believe a single industry voice is the way to go however that looks beyond reach at the moment.
On the issue of price, I find I can compete on a lot of lines off promotion – where we get blown away is that the customer generally has a perception that Officeworks, Big W, etc are always cheaper and this is because they have run very successful on-going marketing campaigns (under a single banner)!
Jim,
You hit the nail on the head with your point about ‘customer perception’. Newsagents need to have a very strong point of difference so customers can develop a different perceiption about newsagencies.
Some newsagencies are doing well in creating a different customer perception in areas such as gifts and cards, but stationary is the big category that the industry generally fails in. GNS needs one massive overhaul and marketing groups need to focus heavily on improving the stationary category in their stores.
And on a representation side, i suppose we will have to see how events unfold over the next 6-12 months.